Pensions Dashboards (Prohibition of Indemnification) Bill

Baroness Altmann Excerpts

2nd reading
Friday 3rd March 2023 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I congratulate my noble friend Lord Young on his excellent introduction and sponsorship of this important but limited Bill. I also congratulate our honourable friend Mary Robinson on introducing it in the other place. I am delighted that the Government and my noble friends on the Front Bench are supporting this Bill.

As my noble friend Lord Young has explained, the pensions dashboard should be, and I hope will be, an important element of the pensions landscape for ordinary people who have pensions savings and perhaps wish to know more about what they have in their pension fund. Given the complexities of pensions, and even with contributions going into them, so many people do not really understand or know quite how much money is going in on their behalf or how much is accumulating for them. So there is a job of work to do on financial education.

What is so important is that, once people can see all their pension information, they can be assured that the system in place to oversee the dashboards protects them. This Bill is an added element of the armoury that is so important in ensuring that rogue operators of a pensions dashboard would not be able to cover up their mistakes or pay for their mistakes by taking money out of individuals’ pension funds. It is hard to see how someone would argue against the measures in the Bill, which simply will mean that, if the person providing the dashboard or responsible for the dashboard is fined by the regulator for doing something against the rules, they cannot just take money out of the ordinary customers’ pension funds but would have to pay it themselves. Although my noble friend considers the penalties significant, one might argue whether a £5,000 fine, or even a £50,000 fine for a corporate, is sufficient to deter wrongdoing. I think the level of penalties is applicable across pensions and will, I hope, be sufficient to ensure that we have a safe system.

I have given my noble friend notice of a few questions I have about the dashboard, which are very important in terms of the programme itself, especially after the announcement yesterday by our honourable friend Laura Trott, the Pensions Minister, that the dashboard programme is going to be reset—whatever that might mean; we will find out soon.

The first question, which relates to the clear need to delay the introduction of this long-awaited measure, is on the security of Verify, or its alternative system, which is designed to protect members’ data. I do not know if my noble friend could update the House on that. Some of the problems were due to what we have learned recently about the errors in state pension records, especially for women, where many women have found that the information is incorrect and, in some cases, has been for many years—they were already in retirement and still had not had the correct amount. How is the department getting on with its correction exercise?

The other concern might be around the records and readiness of public sector pension schemes to connect to the dashboards. With the McCloud remedy needing to be implemented, there are going to be significant administration issues. Could my noble friend give us any comfort on that or an indication of timescales? I hope he can assure us that at least the Nest Pensions fund is ready for connection. That is a very large one, set up by the Government to cater for low-paid workers and people with small amounts of pension.

Finally, I ask for clarity from my noble friend on an issue I have raised so many times in this House, and have tried to insert in the legislation as it has been going through. What is the status of the checks on the accuracy of all pensions data? I understand that the fines we are discussing may be imposed if people fail to connect to a dashboard or do not have a service that works properly on the dashboard, but are there also fines and penalties for people who load incorrect data? It is not just about loading the information. Is there any requirement in law—and who would it fall upon and what would be the penalties for failure—to ensure that the pension information for each person has been checked and verified and is as accurate as that process could produce?

Overall, I welcome the Bill and am pleased that the Government are supporting it. I wish it safe, quick passage through the House.